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AGILENT TECHNOLOGIES INC. $32 (New York symbol A; Aggressive Growth Portfolio, Manufacturing & Industry sector; WSSF Rating: Average) is the world’s leading maker of testing and measurement equipment. Companies in telecommunications, electronics and medical sciences use Agilent’s equipment to improve the quality of their own products. Agilent gets about two-thirds of its revenue from customers outside of the United States. Revenue fell from $8.4 billion in 2001 (fiscal years end October 31) to $6.0 billion in 2002 after the company sold a division. The end of the tech boom also cut demand for its products. Revenue rose from $6.06 billion in 2003 to $7.2 billion in 2004, but slipped to $6.9 billion in 2005....

CHIPOTLE MEXICAN GRILL INC. $50 (New York symbol CMG) is an 50.8%-owned McDonald’s unit that operates 500 Mexican food restaurants in 23 states. This past January, Chipotle sold “A” shares (one vote per share) to the public at $22 each. McDonald’s offer lets its investors exchange all or some of their shares for Chipotle Class B common shares (10 votes per share; New York symbol CMG.B). The company will calculate the final exchange ratio before the offer expires on October 5, 2006. McDonald’s designed the offer so that its investors get to acquire Chipotle at a 10% discount. It feels the swap is tax-deferred, but the IRS has yet to issue a final ruling....

MCDONALD’S CORP. $40 (New York symbol MCD; Conservative Growth Portfolio, Consumer sector; WSSF Rating: Above average) is giving its stockholders an opportunity to exchange their McDonald’s stock for a holding in its Mexican food subsidiary.

GENNUM CORP. $11.50 (Toronto symbol GND; Aggressive Growth Portfolio, Manufacturing & Industry sector; SI Rating: Above average) is the highest rated stock in the bunch. It makes chips that enhance the quality of video signals, mostly for major TV display makers and broadcasters. This business supplies two-thirds of its revenue. Gennum also makes audio chips for hearing aids and headsets. Demand for high-definition TV sets is growing fast, and Gennum has won several new video chip contracts in the past year. The company’s new audio headsets, which help filter excess sounds in noisy environments, also have great potential. The company is free of long-term debt and has a healthy record of earnings. But its small size may make some investors wonder if it can live up to its potential....

NORTEL NETWORKS CORP. $2.60 (Toronto symbol NT; Aggressive Growth Portfolio, Manufacturing & Industry section; SI Rating: Speculative) is one of the world’s leading suppliers of telephone and computer network equipment to large telephone service providers and corporations. Nortel has completed its recent accounting review, and is now up to date with its earning filings. In the second quarter of 2006, it earned $0.08 a share (total $366 million), compared with a loss of $0.01 a share ($33 million) a year earlier. (All amounts except share price in U.S. dollars.) However, the latest results included a partial reversal of an earlier charge to settle a shareholder class-action lawsuit. That increased income in the latest quarter by $510 million, and offset $45 million in restructuring costs and a $10 million loss on the sale of assets. The loss in the year-earlier quarter included $92 million in restructuring costs and an $11 million loss on asset sales. Revenue in the quarter grew 4.6%, to $2.74 billion from $2.62 billion, mostly due to strong demand for wireless equipment....

THE WESTAIM CORP. $3.90 (Toronto symbol WED; Aggressive Growth Portfolio, Manufacturing & Industry sector; SI Rating: Speculative) is the riskiest of the three. It develops technologies through two subsidiaries: iFire Technology Corp. (wholly owned) and Nucryst Pharmaceutical Corp. (75.0%-owned, Toronto symbol NCS). Nucryst sold shares to the public late last year, and Westaim aims to eventually sell stock in iFire as well. iFire is currently developing a faster, cheaper way to make flat-panel displays that it hopes to license to TV manufacturers....

SLEEMAN BREWERIES LTD. $17.38 (Toronto symbol ALE; Aggressive Growth Portfolio, Consumer sector, SI Rating: Average) has accepted a friendly $17.50-a-share all-cash offer from Japan’s Sapporo Breweries Ltd. That’s a 150.0% gain over the $7 that we first recommend Sleeman at in our November 1999 issue. Two-thirds of Sleeman’s shareholders must approve the takeover at a special meeting in October 2006. We advise Sleeman investors to vote in favour of the deal, and tender their shares to get the full $17.50.

INCO LTD. $85.50 (Toronto symbol N; Conservative Growth Portfolio; Resources sector; SI Rating: Average) is the world’s largest producer of nickel. It recently dropped a plan to merge with U.S.-based copper producer Phelps Dodge Corp. It now seems likely that an $86.00-a-share all-cash offer from Brazilian mining firm Companhia Vale do Rio Doce (CVRD) will succeed. We first recommended Inco at $41 in our January, 1995 issue, and the CVRD offer works out to a gain of 109.8%. Inco will undoubtedly try to attract another bidder, if only to get CVRD to raise its bid....

ALCAN INC. $47 (Toronto symbol AL; Conservative Growth Portfolio, Resources sector; SI Rating: Average) is the world’s second-largest producer of aluminum, after U.S.-based Alcoa Inc. Canada accounts for about half of Alcan’s aluminum production, while the other half comes from operations in 14 other countries. The company is also a leading producer of aluminum products, including aluminum sheet, foil, wire and cable, auto parts and construction products. Alcan gets about 45% of its revenue from bulk aluminum sales, and 55% from aluminum products. Alcan’s revenue fell from $12.6 billion in 2001 to $12.5 billion in 2002 (all amounts except share price in U.S. dollars). In late 2003, Alcan acquired European aluminum producer Pechiney SA. That pushed revenue up to $13.6 billion in 2003, and to $24.9 billion in 2004. To satisfy competition regulators, Alcan spun off its rolled aluminum product operations as a separate company called Novelis Inc. Consequently, revenue in 2005 fell to $20.3 billion....

AGRIUM INC. $27 (Toronto symbol AGU; Aggressive Growth Portfolio, Resources sector; SI Rating: Average) is one of the world’s largest producers of agricultural fertilizers, with plants in Canada, the United States and Argentina. The company sells its products through independent wholesalers, as well as through 500 company-owned retail outlets in the U.S. and South America. Agrium’s revenue grew from $2.1 billion in 2001 to $3.3 billion in 2005, mainly due to acquisitions (all amounts except share price in U.S. dollars). It lost $0.06 a share in 2001 and $0.08 a share in 2002, as poor weather in North America hurt fertilizer demand. Agrium’s profits improved from $0.79 a share ($125 million) in 2003 to $2.11 a share ($283 million) in 2005. Cash flow per share more than tripled, from $1.07 in 2001 to $3.27 in 2005. Agrium is now using its strong cash flow to expand its retail operations, which supplied 18% of its 2005 profit. Earlier this year, it paid $474 million for Royster-Clark Ltd....

MTS SYSTEMS CORP. $34 (Nasdaq symbol MTSC; Aggressive Growth Portfolio, Manufacturing & Industry sector; WSSF Rating: Average) makes equipment that manufacturers use to test the mechanical behavior of materials, machines and structures. In its third fiscal quarter ended July 1, 2006, earnings from continuing operations fell 6.3%, to $0.45 a share (total $8.5 million) from $0.48 a share ($9.9 million) a year earlier. Sales grew 1.3%, to $95.9 million from $94.7 million. Although MTS sold more equipment, it received fewer orders for custom-made equipment, which generate higher profits for it than its regular products....

AVAYA INC. $10 (New York symbol AV; Aggressive Growth Portfolio, Manufacturing & Industry sector; WSSF Rating: Average) is a leading maker of telecommunication equipment for large businesses and government agencies. This gear helps its clients efficiently manage their voice, data and Internet traffic. The company gets roughly half of its revenue selling equipment, and the other half from maintenance and other services. That cuts the company’s exposure to the increasingly competitive telecom industry. At the 2006 FIFA World Cup soccer tournament in Germany, Avaya installed the largest voice and data network ever built. The U.S. Army recently selected Avaya, as part of a group, to overhaul communications at its bases around the world....

NCR CORP. $34 (New York symbol NCR; Aggressive Growth Portfolio, Manufacturing & Industry sector; WSSF Rating: Average) is a leading maker of automated teller machines (ATMs), cash registers and bar code scanners. It also provides customers with maintenance services and supplies such as paper and ink. NCR’s fastest growing business is its Teradata division, which helps businesses capture and analyze data such as customer buying habits. Identifying trends helps Teradata clients improve customer satisfaction, and expand sales. Teradata accounts for 25% of NCR’s revenue, but 60% of its profit. Thanks to an 11% rise in revenue at Teradata, NCR’s overall revenue in the three months ended June 30, 2006 rose 4.1%, to $1.53 billion from $1.47 billion a year earlier. Net income fell 37.3%, to $0.42 a share (total $78 million) from $0.67 a share ($127 million)....

XEROX CORP. $15 (New York symbol XRX; Conservative Growth Portfolio, Manufacturing & Industry sector; WSSF Rating: Average) is one of the world’s leading makers of printers, copiers and document publishing equipment. Overseas markets account for about half of its sales and profits. In the three months ended June 30, 2006, Xerox’s earnings fell 35.0%, to $0.26 a share (total $260 million) from $0.40 a share ($423 million) a year earlier. However, the year-earlier quarter included a non-recurring net gain of $213 million. Sales rose 1.5%, to $3.98 billion from $3.92 billion. The company spends around 5% of its annual revenue of around $16.00 a share on research. It has to write off these costs immediately, which hurts its earnings. But this spending has helped Xerox become the largest maker of black-and-white publishing systems in the United States and Europe....

AT&T INC. $30 (New York symbol T; Income Portfolio, Utilities sector; WSSF Rating: Average) is the largest telecommunications company in the United States, with 47.9 million traditional lines in service in 13 states. It’s also the nation’s largest provider of wireless services, with over 57 million customers. The company took its present form and name in November 2005 when SBC Communications Inc. acquired the old AT&T Corp. for $16.3 billion in cash and stock. AT&T stockholders wound up owning 16% of the combined company. The new company gets roughly 50% of its revenue from providing telephone and data services to businesses. Its wireless and consumer businesses each supply 25% of its revenue....

ACE CASH EXPRESS INC. $29 (Nasdaq symbol AACE; Aggressive Growth Portfolio, Finance sector; WSSF Rating: Speculative) has accepted an all-cash offer of $30 a share. We first recommended ACE in our January 2000 issue at $18, so this offer represents a 66.7% gain. ACE stockholders should tender their shares to get the full $30.

GOLDEN WEST FINANCIAL CORP. $76 (New York symbol GDW; Conservative Growth Portfolio, Finance sector; WSSF Rating: Average) plans to merge with Wachovia Corp. (New York symbol WB) in a cash-and-stock deal currently worth $77.24 per Golden West share. We first recommended Golden West in our December 1999 issue at $16.83 (adjusted for splits), which works out to a 359% gain....

FORTIS INC. $24 (Toronto symbol FTS; Conservative Growth Portfolio, Utilities sector; SI Rating: Above average) supplies electrical power to around 915,000 customers in five Canadian provinces. It also owns or invests in electrical utilities in New York State, Belize and the Cayman Islands. Its real estate division owns hotels and other commercial properties, mainly in Atlantic Canada. The company has increased its dividend in each of the past 32 years. The current rate of $0.64 a share yields 2.7%. That’s lower than TransAlta, TransCanada and Emera, but we feel that Fortis’s focus on expanding its operations outside of Atlantic Canada should enhance its earnings growth, and let it continue its policy of annual dividend increases. In the second quarter of 2006, Fortis earned $37.9 million, down slightly from $38.2 million a year earlier; per-share earnings remained unchanged at $0.37....

EMERA INC. $20 (Toronto symbol EMA; Income Portfolio, Utilities sector; SI Rating: Average) is the main supplier of electrical power in Nova Scotia, and Bangor, Maine. Emera’s high market share and largely regulated operations give it plenty of steady cash flow to increase dividends (its current dividend of $0.89 a share yields 4.5%) and fund new projects. For example, Emera recently agreed to build a $350 million pipeline that would transport natural gas from a proposed liquefied natural gas (LNG) terminal near Saint John, N.B. to the U.S. portion of the Maritimes & Northeast Pipeline in Maine. (Emera owns 12.9% of the Maritimes & Northeast pipeline.)...

TRANSCANADA CORP. $35 (Toronto symbol TRP; Conservative Growth Portfolio, Utilities sector; SI Rating: Above average) operates a 41,000-km pipeline network that transports natural gas from Alberta to central Canada and the United States. This business supplies 60% of its profit. The remaining 40% comes from its energy division, which owns or operates 23 electrical power plants. The company has increased its dividend every year since 2000. The current annual rate of $1.28 yields 3.7%. In the second quarter ended June 30, 2006, TransCanada’s earnings from continuing operations grew 22.0%, to $0.50 a share (total $244 million) from $0.41 a share ($200 million) a year earlier....

TRANSALTA CORP. $24 (Toronto symbol TA; Conservative Growth Portfolio, Utilities sector; SI Rating: Average) operates 51 electric power plants in Canada, the United States, Mexico and Australia. The company currently pays a quarterly dividend of $0.25 a share, for an annual yield of 4.2%. TransAlta’s stock has stayed in a narrow range in the past three years. Investors feared that rising coal and natural gas prices, which account for 85% of TransAlta’s fuel needs, would force it to cut the dividend. Concerns over future maintenance costs at some of TransAlta’s older plants have also weighed on the stock....

IGM FINANCIAL INC. $47 (Toronto symbol IGM; Conservative Growth Portfolio, Finance sector; SI Rating: Above average) is Canada’s largest mutual fund company, with $103.7 billion in assets under management. It also offers retirement planning and other investment services. Power Financial controls roughly 55% of IGM’s stock. IGM has two main subsidiaries. Investors Group sells its products through its own network of 3,600 financial advisors. Mackenzie Financial sells its funds through independent brokers....

GREAT-WEST LIFECO INC. $28 (Toronto symbol GWO; Conservative Growth Portfolio, Finance sector; SI Rating: Above average) is one of Canada’s largest insurance companies, with $191.3 billion in assets under administration. It sells its insurance products directly and through brokers to both individuals and groups. Power Financial controls about 75% of Great-West. The company also provides wealth management and other financial services. Great-West gets roughly 50% of its profit from Canada, 30% from the U.S. and 20% from Europe. Great-West’s revenues rose from $16.1 billion in 2001 to $23.9 billion in 2005, or 10.4% compounded annually. Much of that growth is due to Great-West’s 2003 purchase of rival Canada Life Financial Corp. for $7.2 billion in cash and stock....

SCOTIA CANADIAN GROWTH FUND $63.03 (CWA Rating: Conservative) (Scotia Securities, 40 King Street West, 6th Floor, Toronto, Ontario M5H 1H1. 1-800-268-9 269; Website: www.scotiabank.com. No load — deal directly with the company.) uses fundamental analysis to identify what the managers sees as investments that have the potential for above-average growth. The $571.6 million Scotia Canadian Growth Fund’s 10 largest holdings are Manulife, Suncor Energy, Royal Bank, TD Bank, Barrick Gold, Alcan, CN Railway, CIBC, Talisman Energy and EnCana. Scotia Canadian Growth currently holds 29.3% of its portfolio in the Financial services industry. Its next-largest holding is Energy at 21.3%....

CIBC CORE CANADIAN EQUITY FUND $23.21 (CWA Rating: Conservative) (CIBC Securities, 5140 Yonge Street, Suite 900, Toronto, Ontario M2N 6X7. 1-800-631-7008; Website: www.cibc.com. No load — deal directly with the company.) uses a “bottom-up” approach (using fundamentals such as earnings, cash flow and low debt) to identify companies that trade at reasonable valuations and yet have growth potential. The $627.6 million fund’s top holdings are Petro-Canada, EnCana, Manulife Financial, Falconbridge, Bank of Nova Scotia, TD Bank, Canadian National Railway, Bank of Montreal, Canadian Natural Resources and Suncor Energy. CIBC Core Canadian Equity holds 33.4% of its portfolio in Financial services stocks and 26.4% in Energy stocks....